More on the takeover rumors that have shares of Health Management Associates (HMA+8.1%) moving sharply to the upside in afternoon trading: Community Health Systems (CYH+3.9%) is the most likely buyer, sources tell Reuters, although HCA Holdings (HCA+1%) and LifePoint Hospitals (LPNT+3.3%) are also mentioned as interested parties.

Hospital companies are experiencing systemic shifts in care delivery, according to a new Fitch Ratings report. Persistently weak trends in organic volume growth were evident across the spectrum in the for-profit hospital sector in Q1, with same-hospital admissions dropping 3.8% on average. Healthcare utilization patterns are likely being influenced by the growth of insurance products with higher patient responsibility for medical costs, and a shift away from strictly volume-based pricing schemes and toward value-based care.

Tenet Healthcare (THC+8.5%) moves sharply higher on a pair of upgrades, one from Baird (Outperform from Neutral) and one from UBS (Neutral to Buy). Medicare regulators issued a rule proposing a 0.8% reimbursement hike for hospitals Friday after the bell. Other hospital stocks moving higher in early trading: HCA +8% , HMA +5.9% .

The big surge in health care stocks earlier this month just prior to the government's decision on Medicare Advantage rates may have been due to an email to sent by a former top congressional aide who now happens to be an outside lobbyist for Humana (HUM-1.9%). The email, which is now subject to an SEC probe, was sent to a Washington investment-research firm and circulated to clients just minutes before the close of trading, saying that "credible sources" had told them a decision had been made to restore the payments.

HCA Holdings (HCA) issues preliminary results for the quarter, saying its Q1 will come in at $0.02 on sales of $8.44B, below analysts estimates. The Street was looking for an EPS of $0.90 on revenue of $8.71B. The company attributes the wider loss to a slowdown in the rate of growth in admissions and a weakness in outpatient volumes. Shares -4.7% AH.

HCA Holdings (HCA-0.7%) takes a breather today after a big run in the previous session, spurred by hedge fund and mutual fund buying as positive sentiment continues drive the hospital sector higher. Analysts see HCA as a proxy for the group, and running up 5% yesterday and leading shares of the rest of the sector higher.

Hospital stocks fall following Health Management's profit warning, with Tenet Healthcare (THC-4.2%) also hurt by a downgrade from Deutsche Bank, which cut the stock to "Hold" from "Buy." HCA-2.9%, UHS-0.4%, CYH-1.9%.

The median total salary for the 100 highest-paid CEOs of major companies edged up 2.8% to over $14M in 2012, while the cost of perks, such as the use of private jets, jumped 19% to 320,635. Oracle's (ORCL) Larry Ellison was the top earner, receiving $96.2M in salary, perks and bonuses, and $90.7M in stock options. Other CEOs in the top 10 include HCA's (HCA) Richard Bracken, Disney's (DIS) Robert Iger, Nike's (NKE) Mark Parker, Starbucks' (SBUX) Howard Schultz and American Express' (AXP) Kenneth Chenault.

HCA Holdings (HCA) announces a secondary offering, saying that certain shareholders - consisting principally of affiliates of Bain Capital Partners and Kohlberg Kravis Roberts - intend to sell around 50M shares of stock. No shares are being sold by management or the company. Barclays Capital and Citigroup will act as underwriters. Shares -1.8% AH.

HCA Holdings (HCA-0.3%) is set to finish a lackluster session slightly in the red after missing on its Q4 results earlier today. Net earnings plunged as the for-profit hospital operator booked year-earlier gains, which masked growth in patient admissions and revenue. For the year, the company projected per-share earnings of $3 to $3.30, below Street estimates of $3.46.

A Missouri judge yesterday ordered HCA (HCA) to pay $162M for failing to fulfill commitments to improve run-down hospitals that it bought in the Kansas City area a number of years ago. Judge John Torrence also appointed a forensic accountant to see if HCA owes more money and if it's providing the level of charitable care that it pledged to.